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November 12, 2012

Netflix Fueling Huge Spikes in Internet Traffic

By Steve Anderson

Contributing TMCnet Writer

While many look at their Internet service provider balefully and wonder what miracle will have to happen to get their bandwidth caps hiked, one thing that's becoming crystal clear, thanks to a recent report from Sandvine (News - Alert) Research, is that a lot of that Internet traffic has one common origin point: Netflix.

The Sandvine report found that Netflix, across all time periods in a day, comprises roughly 29 percent of all traffic in North America. Essentially, a little under 20 minutes out of every hour online in North America involves Netflix. As for peak hours--between 9 p.m. and midnight--the numbers only go up in Netflix's favor, as Netflix accounts for 20 minutes out of every hour--33 percent--exactly in the peak times.

But it's not just Netflix that's posing a problem for Internet service providers (ISPs) everywhere; other sources of streaming video, like Amazon, Time Warner's (News - Alert) HBO Go and Hulu are also seeing their levels of traffic start to climb. In fact, based on the Sandvine report, if all the video sources--and all the streaming audio sources as well, like Pandora, Spotify (News - Alert) and iTunes--were aggregated together into one single website, the resulting site's traffic would account for 65 percent of all peak period traffic.

Worldwide, things are little different, as peer-to-peer site BitTorrent (News - Alert) accounts for 36 percent of all traffic in Europe and Asia. YouTube, meanwhile, accounts for 20 percent.

This leaves ISPs in a very, very bad situation. The plain and simple is, their users are clamoring for streaming video--and audio to a somewhat lesser extent--and they're not going to take "infrastructure is expensive" for an excuse. While in the short term, the only viable solution may appear to be to clamp down on total traffic, as evidenced by bandwidth caps and tiered pricing schemes, this method leaves ISPs incredibly vulnerable to outside influences that will provide what users want. Consider the recent arrival of Google (News - Alert) Fiber in Kansas City, and the impact that's having, to see just what other providers will likely be having to deal with before too much longer has passed.

It doesn't take much to see Google Fiber in homes all over the country, with users more than happy to sign up for a competitively-priced service without restrictions. This leaves more traditional ISPs behind the eight-ball. The demand for streaming audio and video isn't going away, and content providers will likely continue to at least be somewhat receptive toward providing their own offerings. Traditional ISPs are going to have to either upgrade...or perish in the face of those who will.